Gateway To Make Major Changes In Business

Executives at Gateway's annual financial analyst meeting in San Diego said Thursday that the company intends to revamp its retail stores and launch a broad range of new products for businesses and consumers. The list of products includes computers, PDAs (personal digital assistants), networking gear and services, home-theater equipment--and even furniture.

Hmmm. So instead of being unable to compete with Dell in the PC arena, they will instead be unable to compete with Sony, JVC, and RCA in the Home Entertainment arena, Ikea in the furniture industry, and Cisco in the networking industry. Wow. Most companies wait to get a lock on one market before expanding into others, Gateway is kinda doin the reverse of that. If Apple does this of course it will be different, comeon it's Apple!

They built 500,000 retail stores all at once without starting off small and testing their concept - which was a bit questionable at best. You could go into a heavily-advertised Gateway store, but you couldn't walk out with a PC the same day. You had to place your order and wait. Unless you really wanted a Gateway, you were likely to walk out to the nearest CompUSA, Sears, or whomever had the nice ad in that day's paper and grab your new PC there.

If I really wanted a new Mac, would I drive down to the nearest Apple Store if my only option was to place my order, and then come back in a few days to pick it up, pack it into my car and drag it home, if I could just go to store.apple.com and save the hassle?

The irony is that sort of diversification generally just sends the profitability plummeting further. Pacific Dunlop springs to mind as an example. I somewhat doubt the markets will respond to this news overly positively because it sends the message, "We don't know how to fix the problems we have so we're going to just try as many areas as possible and see if one works."

The irony is that sort of diversification generally just sends the profitability plummeting further. Pacific Dunlop springs to mind as an example. I somewhat doubt the markets will respond to this news overly positively because it sends the message, "We don't know how to fix the problems we have so we're going to just try as many areas as possible and see if one works."

Done right, diversification helps stabilize companies...just take the huge conglomerates for example. Take IBM's example. Heck, take the local pharmacy for example. Pharmacies these days can't make it on their own, so they generally turn into convenience stores more often than not. They're much more stable since they aren't reliant on one source of profit. Gateway needs protection from market pitfalls...this is one way to do it.